SBF Explains Stub Accounts That Make Alameda’s Position Out Of Control

In an interview with New York Magazine, Sam Bankman-Fried (SBF) went into greater detail about how this happened, acknowledging a significant lack of oversight, accountants, and risk control.
SBF Explains Stub Accounts That Make Alameda's Position Out Of Control

SBF identified two major reasons for FTX’s demise. First, an Alameda margin position grew far too large and was liquidated. This did not entail direct exposure to LUNA, but it was heavily influenced by the breakdown of that biosphere in May.

The second component was a “stub account” left over from when FTX couldn’t establish bank accounts and Alameda’s wallets were used for deposits and withdrawals. This account amassed a substantial debt position while remaining concealed from view. He told NY Magazine:

“The effective position was billions of dollars bigger than it appeared to be.”

In the interview, Bankman-Fried stated that this stub account was the reason Alameda’s margin position was much larger than it appeared.

SBF Explains Stub Accounts That Make Alameda's Position Out Of Control

SBF explained that Alameda accumulated this margin position during the previous year. The transaction consisted of a huge short bet on the US currency. During LUNA’s demise, this market position expanded significantly as the value of its collateral declined.

“That made it from a massively overcollateralized, very safe position, to a moderately overcollateralized, moderately risky position on FTX,” he said.

Bankman avoided questions about whether customer funds were used to cover losses at sister company Alameda Research and whether his negligence would result in prison time while also denying that his actions were fraudulent.

SBF Explains Stub Accounts That Make Alameda's Position Out Of Control

Alameda CEO Caroline Ellison informed staff that the company utilized FTX customer cash to pay recalled loans. SBF denied knowingly co-mingling consumer monies in an interview with the New York Times.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Website: coincu.com

Harold

Coincu News

SBF Explains Stub Accounts That Make Alameda’s Position Out Of Control

In an interview with New York Magazine, Sam Bankman-Fried (SBF) went into greater detail about how this happened, acknowledging a significant lack of oversight, accountants, and risk control.
SBF Explains Stub Accounts That Make Alameda's Position Out Of Control

SBF identified two major reasons for FTX’s demise. First, an Alameda margin position grew far too large and was liquidated. This did not entail direct exposure to LUNA, but it was heavily influenced by the breakdown of that biosphere in May.

The second component was a “stub account” left over from when FTX couldn’t establish bank accounts and Alameda’s wallets were used for deposits and withdrawals. This account amassed a substantial debt position while remaining concealed from view. He told NY Magazine:

“The effective position was billions of dollars bigger than it appeared to be.”

In the interview, Bankman-Fried stated that this stub account was the reason Alameda’s margin position was much larger than it appeared.

SBF Explains Stub Accounts That Make Alameda's Position Out Of Control

SBF explained that Alameda accumulated this margin position during the previous year. The transaction consisted of a huge short bet on the US currency. During LUNA’s demise, this market position expanded significantly as the value of its collateral declined.

“That made it from a massively overcollateralized, very safe position, to a moderately overcollateralized, moderately risky position on FTX,” he said.

Bankman avoided questions about whether customer funds were used to cover losses at sister company Alameda Research and whether his negligence would result in prison time while also denying that his actions were fraudulent.

SBF Explains Stub Accounts That Make Alameda's Position Out Of Control

Alameda CEO Caroline Ellison informed staff that the company utilized FTX customer cash to pay recalled loans. SBF denied knowingly co-mingling consumer monies in an interview with the New York Times.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Website: coincu.com

Harold

Coincu News

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